The Association of Superannuation Funds of Australia (ASFA) has used its latest submission to the Financial Sector Advisory Committee to make clear that the impact of the Financial Services Reform Act has had a major impact on ASFA’s members.
It says the Australian Securities and Investments Commission issued 239 licences to superannuation funds during the two-year transition period but that such figures likely underestimate the impact of licensing on superannuation funds, given the inclusion of superannuation business within licensees who self-identified as “conglomerates”.
As well, it says that practically all superannuation funds have had to comply with the new disclosure requirements, including production of Product Disclosure Statements.
ASFA says it supports the principles underlying FSRA, in particular the need for informed decision-making by consumers, but warns about the cost to the industry.
“Despite the laudable intent, implementation has been expensive and challenging for industry and will continue to prove complex and burdensome without practical improvement,” its submission says.
The ASFA submission points to the fact that FSR emerged out the Wallis Inquiry which anticipated significant industry and product rationalisation.
“Though industry consolidation and product rationalisation has happened, it has been at a much more uneven pace than was originally anticipated,” it says. “This has meant, probably more than expected, FSR’s single regulatory regime has had to accommodate diversity between industries, providers and products. Legislative accommodation of these differences has contributed to some complexity.”
